Xigem Technologies to make strategic investment in lead generation software platform FB LABS

Xigem Technologies (CSE:XIGM) Corporation revealed that it has inked a letter of intent (LOI) to acquire a 25% interest in FB Labs Corporation (FB LABS), a lead generation software company with major success in the hospitality vertical, for around $750,000 in a cash-and-stock deal. FB LABS provides cloud-based software that helps businesses in capturing more leads and converting a higher proportion of them into sales. It also offers a turnkey proposal builder that quickly capitalizes on opportunities with personalized, branded proposals. Businesses using FB LABS' software can increase speed-to-sale, closing rates and workplace efficiencies, while having real-time intelligence on the sales pipeline and customer preferences to enable more effective decisions, said the company. On a continuing basis, the investment will allow Toronto, Ontario-based Xigem recognize its share of profit or loss in FB LABS after the effective date of acquisition. READ: Xigem Technologies sees multiple opportunities to help companies make the shift to the remote economy According to the terms of the LOI, signed on July 14, 2021, the $750,000 sum will be satisfied through $100,000 being paid in cash on closing the acquisition, while $650,000 will be paid in shares of Xigem on the basis of a deemed price per share equal to the volume-weighted average price per share on the Canadian Securities Exchange for 20 consecutive trading days preceding the closing of the deal. In addition, after closing the acquisition, for a period of not less than one year and for as long as the company holds at least 20% ownership in FB LABS, Xigem will have the right to appoint a member to FB LABS' board. Xigem plans to complete the acquisition in the next 45-60 days, subject to the execution of a definitive agreement, after completing its due diligence and getting regulatory approvals. The acquisition is arm's length and no finder's fee are payable, said the company. FB LABS has found initial success in the US$100 billion hotel food and beverage vertical, with nearly 50 hotels currently using the FB LABS platform, including hotels operating under the Fairmont, Novotel, Pullman, Sofitel and Swissôtel banners. Food and beverage typically represent 25% of gross revenues for hotels, more than half of which is generated from catering and banquet services. "FB LABS' customized client acquisition software helps its hotel clients position their food and beverage offering as a competitive differentiator to attract event and accommodation bookings,” said the company. "FB LABS' software helps hotel operators thrive in today's remote economy. This investment aligns perfectly with our strategy of aggregating a portfolio of innovative technologies capable of disrupting traditional customer acquisition and retention business models," Xigem co-founder and CEO Brian Kalish noted in a statement. "We are excited to expand Xigem's potential by both entering the hospitality vertical and integrating FB LABS functionality with our iAgent platform," he added. Xigem and FB LABS intend to pursue opportunities to integrate their software. The combination of FB LABS' lead generation platform and Xigem's iAgent customer relationship management platform has the potential to provide a seamless customer lifecycle solution from prospect to sale to post-sale servicing, said the company. In addition, there are further opportunities to add a payment gateway with FOOi, the peer-to-peer payment app Xigem has proposed to acquire, thereby extending FOOi's customer database as well. "We look forward to working with Xigem to build on our initial success in the hotel market," said FB LABS founder CEO Jonathan Tick. "We have a recurring revenue model and a vision of launching our software at 1,000 hotels within the next three years. Our collaboration with Xigem can help us extend the functionality of our platform to better service our customers and target new markets." Separately, Xigem said in the same statement that it will not be proceeding with its proposed investment in digital logistics platform Shipit.to, as originally announced on April 20, 2021. Contact the author Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive